SAFEGUARD INVESTIGATIONS IN TURKEY: A SNAPSHOT

Talat Kaya

I.         Introduction

Safeguard measures, as defined by the World Trade Organization (WTO), are emergency actions that a country can take to protect specific domestic industries from an unexpected and injuring increase in imports. These measures stand as a critical defense mechanism for countries aiming to protect their domestic industries from sudden and unforeseen surges in imports. These measures are designed to prevent or remedy serious injury to the domestic industry and allow time for adjustment to the import competition. In other words, the core aim of implementing safeguard measures is to provide temporary relief to the affected domestic industries, enabling them to adapt to competitive pressures from increase in imports. By temporarily restricting imports, these measures help maintain industry stability and safeguard jobs and production capacity in the host country. This blog post explores the concept of safeguard measures, their legal bases both internationally and nationally, and the procedural and substantive requirements for their implementation, with an emphasis on Turkey's recourse to these measures.

II.       Legal Foundations of Safeguard Measures

At the international level, the Agreement on Safeguards, under the auspices of the WTO, sets forth the rules for the application of safeguard measures. This agreement is built upon Article XIX of the General Agreement on Tariffs and Trade (GATT) 1994. These legal instruments together lay down the conditions and procedures for the imposition of safeguard measures, ensuring they comply with globally accepted trade laws and principles.

Countries implement the WTO's Agreement on Safeguards through their national legislation. In Turkey, the legal framework governing the application of safeguard measures is detailed in regulations available in the Official Gazette. Key pieces of legislation include the Import Regime Decree No. 3350, Decree No. 2004/7305 on Safeguard Measures in Imports; and Regulation No. 25486 on Safeguard Measures in Imports. Besides specific safeguard measures are implemented through the Communiqués issued by the Ministry of Trade. These are legal instruments that announce the initiation of safeguard investigations, provisional measures, and the imposition of definitive measures. Each communiqué is case-specific and outlines the details of the measure, including the products affected, the duration of the measure, and the rate of additional duties, if applicable.

III.      Implementing Safeguard Measures: Criteria and Process

A.   Conditions:

For safeguard measures to be legitimately applied, three conditions must be met.

Unforeseen Developments: This condition stipulates that the increase in imports must be a result of situations or developments that were not predicted at the time of the country's commitments to the WTO. A variety of economic, political, or social factors may lead to a sudden surge in imports. However, safeguard measures can only be applied in situations that could not have been anticipated and managed through normal trade policy adjustments.

Serious Injury: For safeguard measures to be applied, there must be clear and compelling evidence that the domestic industry is suffering or is at imminent risk of suffering serious injury. This injury is typically measured in terms of a significant loss of sales, profits, market share, or productivity that the domestic industry experiences as a direct result of the import surge.

Causal Link: It's not enough to simply show that an industry is facing serious injury; there must also be a direct causal link between the increased imports and the injury claimed. The investigation must establish that the injury is a direct consequence of the increased imports and not due to other factors such as technological changes, internal industry issues, or shifts in consumer preferences.

B.   Investigation Process

Specific communiqués may entail detailed procedures for applying safeguard measures, depending on the product and circumstances. However, the general overview of procedures for applying safeguard measures in Turkey is as below:

Initiation: The process usually begins with an investigation. This investigation is initiated either upon a receipt of fully documented petitions from the domestic industry affected by increased imports or on an ex-officio basis by the government.

Investigation and Evidence Gathering: The purpose is to determine whether there has been a significant increase in imports of a particular product and whether this increase has caused or threatens to cause serious injury to the domestic industry. For this purpose data and testimonials from affected stakeholders are collected. To validate the collected information or to gather further details, verification visits might be conducted at the relevant parties' premises.

Public Hearings: Public hearings may be held to allow all stakeholders, including importers, exporters, and domestic industry representatives, to present evidence and arguments.

Determination: If the investigation concludes that safeguard measures are warranted, the  Import Safeguard Measures Evaluation Board will make a determination. This determination is based on the investigation's findings regarding the increase in imports and its impact on the domestic industry. Furthermore, evidence should conclusively demonstrate a causal link between the increase in imports and the adverse impact on the domestic industry.

Implementation of Measures: If a determination is made in favor of applying safeguard measures, such measures can be implemented. These measures may include an increase in tariffs, additional financial liability, quotas, or a combination thereof, applied to the imports of the specific product in question. The measures are temporary and are typically applied for a period sufficient to allow the domestic industry to adjust to the competition.

Publication, Notification and Consultation: Turkey publishes and notifies the WTO of any safeguard measures it intends to apply. Additionally, there may be consultations with the exporting countries affected by the measures.

Review and Termination: Safeguard measures are subject to periodic review and must be terminated when they are no longer necessary to prevent or remedy serious injury and to facilitate adjustment by the domestic industry.

IV.     Recent Safeguard Investigations in Turkey: Insights for Importers

Turkey has recently initiated several safeguard investigations, underscoring its proactive stance in protecting domestic industries from sudden increases in imports. The investigations have spanned a range of industries, demonstrating the country's vigilance across its economic sectors. Notably recent investigations targeted textiles, with a specific focus on knitted fabrics, paper products, and household items, including products like brooms and brushes. Businesses, particularly importers should closely monitor these developments, integrating this awareness into their strategic planning and compliance efforts.

Given the dynamic nature of trade regulations and safeguard measures, importers are advised to seek guidance from legal and trade experts. Professionals in Primus Law Office with 15 years of expertise in the Ministry of Trade of Turkey, can provide up-to-date information on recent investigations, offer insights into compliance strategies, and help navigate the complexities of Turkey's trade landscape.